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Rediff.com  » Cricket » Lanka Sports Minister order probe into Nimbus deal

Lanka Sports Minister order probe into Nimbus deal

January 14, 2011 18:34 IST

Sri Lankan Sports Minister, Mahindananda Aluthgamage has ordered a probe into the controversial Nimbus deal that had rocked the country's cricketing circles, besides costing SLC a a huge amount of money.

A three-member committee has been appointed for investigating the matter thoroughly. 

The committee is headed by the former Supreme Court judge Jagath Balapatabendi and also includes secretary of the Power and Energy Ministry, M M C Ferdinando and North Central Provincial Council official W A Tissera. 

"There is a lot of speculation and allegations going round about this issue. So I decided that it is best to appoint a high powered committee with respected officials to investigate the matter and get to the bottom of it," the minister told Daily Mirror newspaper on Thursday.     

"My predecessor Minister C B Ratnayake had promised the Parliamentary Consultative Committee of the Sports Ministry that he would appoint a committee to probe the deal, after several MPs had raised concern about the issue. 

"When I met them for the first time, they asked me what had happened to the promise. So, I immediately decided to appoint a committee mainly because it will provide the accused people a chance to clear their names," Aluthgamage added. 

Nimbus, an Indian based media and entertainment company, was involved in an arbitration battle last year with the SLC for defaulting a payment of USD 3.6 million. 

However, Sri Lanka Cricket (SLC) had come to a settlement with the company after accepting a lower figure than what was due. 

SLC filed arbitration proceedings against Nimbus when the company failed to honour a payment that was due for securing rights of India's ODI series against Sri Lanka, played in February 2009. 

The deal was signed on January 21, 2009 between SLC and Nimbus when the former was controlled by a one-man Competent Authority, Sports Ministry secretary S Liyanagama, appointed by the then Sports Minister Gamini Lokuge.

The TV rights deal was struck for an amount of USD 6 million, which was considered by many as a much below figure that could have been raised, as the experts thought that the high-profile series could have been worth as much as USD 15 million.

During that time, a One-day International involving India was estimated to be worth around USD 3.5 million. 

When the deal was struck, the minister cancelled SLC's TV rights contract with Ten Sports, a Dubai based company, which was to run till year 2011, contending that there were irregularities in that deal.

However, after the series was over, the former minister (Lokuge) made a U-turn and asked SLC to sign a fresh deal with Ten Sports.

Meanwhile, when the deal was struck with Nimbus for the India series, the authorities ignored the basic requirement of a bank guarantee, which was a compulsory component. 

It was because of this lack of bank guarantee that SLC had no way of recovering their dues when Nimbus refused to pay USD 3.6 million after the tournament was over. 

So ultimately, the SLC had to initiate arbitration proceedings.

The cricket board went through an extremly bad experience with Nimbus earlier in 2001 when the then SLC interim committee headed by Vijaya Malalasekara scrapped a deal and ended up paying USD 5 million in damages to Nimbus. 

SLC had to give another Rs 57 million as lawyer fees, apart from Rs 13 million for overseas travel for the case.      Nimbus, meanwhile, has fallen into deeper trouble at present as media reports claim that it has a high debt burden
of approximately Indian Rs 5.79 billion (SL Rs 14.48 billion). 

Nimbus has recently failed to pay back loans taken from several banks through which they had raised the bank guarantee of Indian Rs 20 billion (approximately SL Rs 50 billion) that was needed to secure the TV rights of the Indian Cricket Board (BCCI) for the period April 2011 to March 2014.